Written question asked by Lord Jenkin of Roding (Conservative), in the House of Lords. It was answered by Baroness Verma (Conservative) on Thursday, 23 January 2014.
Energy: Prices
- Question
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To ask Her Majesty’s Government what action they are taking to respond to the suggestion in the Department of Energy and Climate Change's December 2013 Impact Assessment that the Department has underestimated the extent to which wholesale prices will rise in response to tight capacity margins.[HL4553]
- Answer
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The Impact Assessment (IA) notes that DECC's modelling could underestimate the impact on wholesale prices if the Capacity Market is not introduced. However, the Energy Act was passed by Parliament in December and the first capacity auction is scheduled to take place at the end of this year. The Capacity Market will ensure there is sufficient investment to keep the lights on and protects consumers against the risk of high wholesale prices for energy.
As the IA noted, we are seeking to improve the capability of the Department's Dynamic Dispatch Model. In particular we are exploring the use of stochastic modelling to assess the impact of unpredictability in plant outages and demand, as well as the modelling of investor decisions in response to expectations of future prices.
Secondary information
- Type
- Written question
- Reference
- HL4553; 751 c157WA
- Session
- 2013-14
- Subjects
- Energy Prices Wholesale trade
- Link
- View this Written question on www.publications.parliament.uk
Librarians' tools
- Timestamp
- 2022-02-25 12:15:40 +0000
- URI
- http://hansard.intranet.data.parliament.uk/Lords/2014-01-23/14012369000125
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